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Is Invesco S&P 500 Equal Weight ETF (RSP) a Strong ETF Right Now?
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Designed to provide broad exposure to the Style Box - Large Cap Blend category of the market, the Invesco S&P 500 Equal Weight ETF (RSP - Free Report) is a smart beta exchange traded fund launched on 04/24/2003.
What Are Smart Beta ETFs?
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of such characteristics.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
Because the fund has amassed over $30.53 billion, this makes it one of the largest ETFs in the Style Box - Large Cap Blend. RSP is managed by Invesco. This particular fund seeks to match the performance of the S&P 500 Equal Weight Index before fees and expenses.
The S&P 500 Equal Weight Index equally weights the stocks in the S&P 500 Index.
Cost & Other Expenses
For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.
Operating expenses on an annual basis are 0.20% for this ETF, which makes it one of the cheaper products in the space.
RSP's 12-month trailing dividend yield is 1.48%.
Sector Exposure and Top Holdings
ETFs offer diversified exposure and thus minimize single stock risk, but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
RSP's heaviest allocation is in the Industrials sector, which is about 13.80% of the portfolio. Its Information Technology and Healthcare round out the top three.
When you look at individual holdings, Occidental Petroleum Corp (OXY - Free Report) accounts for about 0.38% of the fund's total assets, followed by Mosaic Co/the (MOS - Free Report) and Cf Industries Holdings Inc (CF - Free Report) .
RSP's top 10 holdings account for about 3.07% of its total assets under management.
Performance and Risk
The ETF has lost about -12.92% and is down about -3.94% so far this year and in the past one year (as of 05/23/2022), respectively. RSP has traded between $140.67 and $164.20 during this last 52-week period.
RSP has a beta of 1.06 and standard deviation of 25.06% for the trailing three-year period. With about 506 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco S&P 500 Equal Weight ETF is a reasonable option for investors seeking to outperform the Style Box - Large Cap Blend segment of the market. However, there are other ETFs in the space which investors could consider.
IShares Core S&P 500 ETF (IVV - Free Report) tracks S&P 500 Index and the SPDR S&P 500 ETF (SPY - Free Report) tracks S&P 500 Index. IShares Core S&P 500 ETF has $281.85 billion in assets, SPDR S&P 500 ETF has $348.84 billion. IVV has an expense ratio of 0.03% and SPY charges 0.09%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Style Box - Large Cap Blend.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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Is Invesco S&P 500 Equal Weight ETF (RSP) a Strong ETF Right Now?
Designed to provide broad exposure to the Style Box - Large Cap Blend category of the market, the Invesco S&P 500 Equal Weight ETF (RSP - Free Report) is a smart beta exchange traded fund launched on 04/24/2003.
What Are Smart Beta ETFs?
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of such characteristics.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
Because the fund has amassed over $30.53 billion, this makes it one of the largest ETFs in the Style Box - Large Cap Blend. RSP is managed by Invesco. This particular fund seeks to match the performance of the S&P 500 Equal Weight Index before fees and expenses.
The S&P 500 Equal Weight Index equally weights the stocks in the S&P 500 Index.
Cost & Other Expenses
For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.
Operating expenses on an annual basis are 0.20% for this ETF, which makes it one of the cheaper products in the space.
RSP's 12-month trailing dividend yield is 1.48%.
Sector Exposure and Top Holdings
ETFs offer diversified exposure and thus minimize single stock risk, but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
RSP's heaviest allocation is in the Industrials sector, which is about 13.80% of the portfolio. Its Information Technology and Healthcare round out the top three.
When you look at individual holdings, Occidental Petroleum Corp (OXY - Free Report) accounts for about 0.38% of the fund's total assets, followed by Mosaic Co/the (MOS - Free Report) and Cf Industries Holdings Inc (CF - Free Report) .
RSP's top 10 holdings account for about 3.07% of its total assets under management.
Performance and Risk
The ETF has lost about -12.92% and is down about -3.94% so far this year and in the past one year (as of 05/23/2022), respectively. RSP has traded between $140.67 and $164.20 during this last 52-week period.
RSP has a beta of 1.06 and standard deviation of 25.06% for the trailing three-year period. With about 506 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco S&P 500 Equal Weight ETF is a reasonable option for investors seeking to outperform the Style Box - Large Cap Blend segment of the market. However, there are other ETFs in the space which investors could consider.
IShares Core S&P 500 ETF (IVV - Free Report) tracks S&P 500 Index and the SPDR S&P 500 ETF (SPY - Free Report) tracks S&P 500 Index. IShares Core S&P 500 ETF has $281.85 billion in assets, SPDR S&P 500 ETF has $348.84 billion. IVV has an expense ratio of 0.03% and SPY charges 0.09%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Style Box - Large Cap Blend.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.